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Thursday, October 30, 2008

Act fast on emissions: Swan

The Age, Tim Colebatch, Canberra

October 30, 2008

AUSTRALIA could lower the cost of tackling global warming by 15% if it moves quickly rather than waiting until the world is ready to act, according to Treasury modelling to be released today.

The long-awaited modelling, to be presented by Treasurer Wayne Swan and Climate Change Minister Penny Wong in Brisbane this morning, gives the green light to the Government's plans to introduce emissions trading from 2010.

It concludes that to delay action would make Australia significantly worse off in the long run by encouraging companies to invest in emissions-intensive technology that will ultimately become a liability.

In remarks prepared for a speech today, Mr Swan says the modelling leaves a clear message: "Acting early is an economic imperative. Economies that defer emission pricing become relatively more emissions-intensive, so when an emission price is eventually introduced, they face greater costs, particularly because global investment is redirected to early movers.

"The modelling suggests that by 2050, GDP costs for economies that act early are 15% lower than for countries that wait for the world to act together."

The finding is politically significant, because the Coalition, which is clearly divided on the merits of emissions trading, has united on a call for the Government to delay its introduction to 2011 or 2012.

Yesterday Senator Wong reaffirmed the Government's commitment to starting the scheme from 2010, and Mr Swan will confirm that today. The Government plans to release its blueprint in December.

The modelling concludes that Australia can reduce carbon emissions while increasing output and living standards.

It also says:

■Putting a price on carbon emissions will reduce global demand for emissions-intensive goods and services, such as coal, but Australia is likely to increase its share of the coal trade as its coal is relatively cleaner than that of most countries.

■The Government's plans to compensate emissions-intensive industries with free emission permits will remove the incentive for them to move overseas.

The release of the Treasury report coincides with analysis commissioned by the ACTU and the Australian Conservation Foundation that found Australia could have more than 700,000 new green-collar jobs by 2030 if the Government backs industries in which the country has a competitive advantage.

Titled Green Gold Rush, it is designed to "explode the myth" that tackling climate change would destroy the economy. It found developing six green industries, including renewable energy and green buildings, could generate $382 billion and employ 847,000 people.

ACF executive director Don Henry said it challenged the "shrill doom and gloom" of Australia's biggest industrial emitters. "Our own analysis has been that many of them have been crying wolf," he said.

Meanwhile, the European Union, in a significant change of tack, is now calling on developing countries to cut their greenhouse gas emissions by between 15% and 30% by 2020, relative to business as usual.

EU leaders put their new demand to Asian leaders last week at their annual summit in Beijing, receiving a muted response. Asian leaders agreed to the principle of cutting emissions without endorsing the numbers.

The EU had argued that only the wealthy countries needed to accept emissions targets at this stage. Its change follows data on global emissions growth, which suggests that emissions from developing countries are growing so fast that action by rich countries alone after 2012 will not be enough to hold global warming to two degrees above pre-industrial levels.